While US President Donald Trump, fighting a sharp anti-incumbency over his alleged mismanagement of the world’s largest economy, announced Audi’s proposal of pumping USD 4 billion into a new US assembly plant, the German automaker’s CEO, Gernot Doellner, has defended the move.
Trump announced the proposal at a rally in Georgia ahead of the all-important midterm elections, scheduled to be held in November.
Doellner stood alongside Trump at a rally in Perry, near Macon, on Saturday, as the US president said Audi, part of Volkswagen Group, planned to build a manufacturing facility in Georgia capable of producing 200,000 sport utility vehicles (SUVs) annually.
The investment, however, still requires final approval from Volkswagen’s supervisory board before it can proceed.
“This decision was preceded by many months of careful planning and intense negotiations,” Doellner told reporters on Sunday.
He added that accepting an invitation from the US president reflected respect for the office and the country in which the automaker planned to invest.
The proposed Audi plant provides a respite for Trump, who aims to showcase that his tariffs are bolstering US manufacturing and enhancing the domestic economy, amidst challenges such as inflation, high energy prices, and a cost-of-living crisis that have become the central midterm narrative, transcending party lines.
Georgia faces competitive elections for both the US Senate and governor in November.
As per Audi, the planned investment would create approximately 4,500 jobs, with construction scheduled to begin in 2027 and production expected to start in the early 2030s.
While an American official told Reuters that the facility is expected to assemble the Audi Q7, Q8, and Q9 SUVs, Doellner declined to disclose the full details of the proposed investment agreement, including whether the German giant would receive tariff relief.
The German automaker currently imports all vehicles sold in the US from Europe or Mexico, leaving it exposed to tariffs imposed by the Trump administration on automobiles, steel, aluminum, and vehicle parts.
Audi has said those tariffs cost the company around 1.2 billion euro (USD 1.4 billion) last year, adding to the financial pressures facing the European automotive industry.
Critics argue that the tariffs have also raised vehicle prices in the US and delayed investment decisions by automakers, complicating the administration’s efforts to expand domestic production.
CEO of Audi parent Volkswagen, Oliver Blume, said the US remained an important market for the group’s growth strategy.
“We regard the region as a key market for profitable growth. A potential Audi plant in the US would create further conditions for expansion,” Blume said.
The proposed investment, however, has drawn sharp criticism from Germany’s powerful IG Metall union, which questioned Doellner’s appearance alongside Trump during the election campaign.
A union spokesperson stated that the decision to reach out to the US president was “difficult to understand,” arguing that Trump’s policies posed a threat to Germany’s domestic economy, particularly its automotive sector.
The tariff dispute has added to tensions between Volkswagen management and workers, as the company faces pressure to reduce costs through potential job cuts and plant closures in Germany.
Christiane Benner, head of IG Metall and Volkswagen’s deputy supervisory board chair, said improving Audi’s position in the US market through a new factory was “right and necessary.”
However, she stressed that workers across the group’s manufacturing sites, particularly in Germany, needed clearly defined employment prospects.
Olaf Lies, premier of Lower Saxony, Volkswagen’s second-largest shareholder, also called for US expansion to benefit German workers.
“Growth in America must secure jobs and value creation here and must not displace them,” Lies said.
Audi’s proposed Georgia facility forms part of Volkswagen Group’s broader efforts to strengthen its manufacturing presence in the world’s largest economy.
As per the Trump administration, Audi also planned to produce 25,000 vehicles annually in neighbouring South Carolina.
The vehicles would be assembled at a USD 2 billion plant being built by Volkswagen’s off-road brand Scout Motors in Blythewood, near Columbia.
“Some of those vehicles, which are currently manufactured in Europe, would be exported,” another government official told Reuters.